MILTON CHANG of
Incubic Management is the
author of Toward
Entrepreneurship (www.
miltonchang.com), was
president of Newport and
New Focus, and is on the
boards of several
companies. He is a trustee
of Caltech and has served
on the SEC Advisory
Committee, NIST Visiting
Committee, and the
authoring committee of the
National Academy’s report
on optics and photonics.

He is a fellow of the IEEE,
OSA, and LIA. Direct your
management, business,
and career questions to
miltonchang@incubic.com.

THE INTERSECTION OF BUSINESS AND PHOTONICS TECHNOLOGY

What to do when you
see criminal behavior in
a photonics business

MILTON CHANG

I was surprised to read in the news
that a software engineer working for
Volkswagen (V W; who was still on the
payroll of the company at the time of
the sentencing) was sentenced to 40
months in jail and fined $200,000
for designing the software to falsify
emission data. That prompted me to
do some research and write this column
to sensitize us in the photonics industry on what we should be aware of on
the job. I called my friend Judy O’Brien,
who now heads the Silicon Valley corporate group of a leading international law firm, for a few pointers to get
me started.

The V W case is easy to
understand. Anyone par-
ticipating in a crime is
punishable by law, even
if the engineer in this case
was just following orders.
That is not dissimilar to
a killer being guilty, even
though he or she is a hired
hand. In the V W case, the
crime is a violation of the
Clean Air Act (CAA) by
knowingly constructing
equipment in violation
of the National Emission
Standards for Hazardous
Air Pollutants established
by the Environmental
Protection Agency (EPA)
and, no doubt, also mak-
ing false statements in
CAA filings.

I can think of two criminal situations an engineer may encounter in a photonics business: disposal of toxic material and violation of the International
As an employee, you have a mandatory reporting requirement to
report suspicious work-related crimes, especially those relating to
safety and environment issues. Given the many provisos, when in
doubt, report to the proper authorities. That said, prosecutions for
failure to report are very rare, and usually involve strong evidence
of a serious harm that could have been prevented if a person with a
duty to make a report had done so.

There are many reasons why an employee chooses not to speak
up or make a report. In the case of the VW engineer, he cited his
sense of loyalty having worked for the company for 34 years, which
proved to be an inadequate defense.

A more common reason for failure to report is fear of reprisal by
the company or by fellow workers. Here, the whistleblower laws
of the Sarbanes-Oxley Act come to the rescue. In short, a reporting employee is well protected. Public companies are required to
adopt a code of business conduct and ethics, and to establish procedures to enable employees to file internal whistleblowing com-
plaints and to protect the employees who file allegations. Also,
employees are protected when it comes to the “commission of any
federal offense.” That, for sure, will apply in the case of a possible
ITAR violation.